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The joint documents of the CIRC and the Ministry o
Published:1/19/2018 4:36:25 PMViews: 434
The China Insurance Regulatory Commission and the Ministry of Finance jointly issued the guiding opinions on strengthening the management and application of insurance funds, supporting and preventing local debt risks, supporting the insurance institutions to serve the real economy more safely and efficiently, and prevent and defuse local debt risks.
The guiding opinions clarified the policy boundary of the application of insurance funds related to local governments' debt financing activities, and put forward that we should standardize investment in insurance funds and resolutely curb illegal and illegal debt guarantee activities. Specifically, the first is to encourage the insurance institutions to invest in accordance with the law. While supporting the investment of insurance funds and other government investment projects related to the national economy and the people's livelihood, it is clear that it is not illegal to provide financing to local governments, nor is it necessary for local governments to make illegal or irregular debts to insurance agencies. Two is to properly cooperate with the stock debt risk disposal. The insurance agencies should properly handle the stock and investment business of the local government. The local government should actively support it, find the risk in time, and deal with it in a timely manner. The three is to regulate the behavior of the investment and financing platform company. The insurance agency should fully assess the affordability of local finance, and should not add local government debt through the financing platform company. The local government should promote the disclosure of financial and debt information in accordance with the rules and ensure the right to know of the insurance institutions. The four is to carry out innovative business with prudent compliance. The insurance agencies may not form local debt through innovative ways such as equity investment plans. In the name of the social capital, such as the insurance agencies, the local government should be resolutely stopped. Five is to strengthen the industry risk management. The related industry organizations in the insurance industry should play a platform role and strengthen the monitoring of local debt risks. Local governments are urged to speed up the establishment of joint monitoring and prevention and control mechanisms across departments, to strengthen information sharing and to support insurance institutions to improve the risk management system. The six is to carry out the responsibility of the market subject strictly. We should strengthen the responsibility of risk management of insurance institutions, improve the accountability mechanism, and strengthen the accountability of insurance institutions and intermediary service institutions.
The China Insurance Regulatory Commission said that "guidance" is conducive to the positive guidance of insurance institutions and local governments to perform debt financing activities conscientious and accountable, which is conducive to strengthening the sense of responsibility of insurance institutions, preventing and resolving local debt risks, and achieving a win-win development of the industry and the real economy. The next step, the CIRC will further cooperate with the Ministry of Finance and other relevant departments to improve the relevant policies to form a joint supervision and better play the effect of the policy.